Investing has been around for decades, but as with any industry, the investment sector has had to adapt to improved technology over time. Some of the incredible impacts that technology has had on investing are as follows:
- The Industry Has Gone Electronic
- Greater Access To Investments
- The Speed Of Transaction Has Greatly Increased
- Day Trading
- Robotic Advisers
The Industry Has Gone Electronic
Even in the early 1800’s, individuals began with trading stocks. Although the process looked a bit different back then, stock exchanges are still a current form of investment. A physical piece of paperwork, the “stock,” had to be issued by a stockbroker to an individual who would then pay them cash. This led to safes full of slips of paper that proved ownership. However, due to technology advancements, all stocks are electronic and can be purchased with just the click of a button on a computer.
Greater Access To Investments
It is estimated that well over half of Americans now own stock thanks to much easier access. This number used to be far lower because there were far more hoops to jump through and the fees to a broker deterred some investors. Now, some electronic platforms have zero transaction fees giving greater access to consumers.
The Speed Of Transaction Has Greatly Increased
Along with the rise in investment technology came the increased speed of financial transactions. In the past, transactions could only occur as fast as brokers could approve them. Now, millions of transactions take place every single day with millions of computers keeping track of it all. This has also given rise to new investing techniques since dozens of sales can be done per day.
Day trading is a technique where someone buys a stock when its price is low and then sells it when it hits a higher price on the same day. Although it can be risky, the rise in popularity of this technique is directly correlated to improved investment technology.
Traditionally, only trained professionals would charge clients to have their funds managed for them. Now, thanks to robotic advisors, sophisticated computer programs can manage your money for you. This involves the investor indicating their risk tolerance and a few other key metrics before the robotic adviser can do its job.
Due to technology advancements, investing is now easier and quicker. There are many ways that technology has increased the investment industry, and we will continue to see changes in the future.